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The Kudlow Report

News/Business. Larry Kudlow. Larry Kudlow provides his unique perspective on business, politics and investing. New.

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Koch 9, Us 6, Obama 6, Jim Iuorio 6, Jim Pethokoukis 6, New York 5, Washington 5, Keith Boykin 5, Dan Marino 5, China 5, Marino 5, New York City 4, Brian Kelly 4, Keith 4, Cbs 3, Nick Mulvaney 3, Bernanke 3, Larry Kudlow 3, Brian Schactman 3, Albany 2,
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  CNBC    The Kudlow Report    News/Business. Larry Kudlow. Larry Kudlow provides his  
   unique perspective on business, politics and investing. New.  

    February 1, 2013
    7:00 - 8:00pm EST  

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♪ let's go. ♪ ♪
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♪ [ male announcer ] introducing the all-new cadillac xts... another big night on the town, eh? ...and the return of life lived large. i'd like to say that's always a market somewhere, i promised to find it just for you on "mad money." i'm jim cramer and i'll see you monday. good evening, everyone. i'm larry kudlow. this is "the kudlow report." so the sizzle story tonight. the dow jones stock index passed a major milestone today, moving above 14,000 for the first time since 2007, 2007. and by the way, the s&p 500 remains above its milestone of 1,500. profits are the mother's milk of stocks. you've heard me say that a
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million times. as long as profits keep rising, and the fed stays easy, i think this unappreciated rally may continue for a good long time. but much more on that coming up. first we go to cnbc's bob pisani on the floor of the new york stock exchange with today's big numbers. good evening, robert. >> reporter: larry, the dow finally crossed 14,000, but a lot of people were wondering why the rally given the tepid jobs report. i'll give you five reasons for it. number one, the revisions in the jobs report in november and december were significant. and the bottom line is the job market was better than a lot of people thought in 2012. second, it was the first day of the month and we saw significant inflows. volume was strong. that was a major factor in the rally. number three, the economic news elsewhere was quite strong. ism, consumer confidence, and car and truck sales were all better than expected. number four, china's manufacturing numbers continued to show expansion. and finally, for those of you in the bad news is good news camp, larry, unemployment rate ticked higher. that means the federal reserve
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will continue with its stimulus program. back to you. >> all right. many thanks. cnbc's market pro bob pisani. let me just repeat my view quickly on this underappreciated rally. again, profits are the mother's milk of stocks. they are at record highs. that by itself supports the market. plus, easy money from the fed. it's an important but sometimes overrated factor. but that isn't going to end anytime soon. for me the global picture's improving and even though we're not really on a free market supply side path right now, i dare say if washington doesn't bomb us with a mega ton of taxes on investment we should be okay. nothing's ever perfect. and corrections are going to come and go. but all this, i see the stock market running up for a good while. now, let's get some advice on how to play it or disagree with it. go to our distinguished panel. ryan kelly, co-founder of shelter harbor capital. jim iuorio, director at tjm institutional services, and cnbc contributor jim pethokoukis.
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i want to go to b.k., brian kelly first. do you buy the rally continuing? how do you play this? what do you do right now? this is almost like a technical portfolio manager's question. >> yeah. i think probably the best thing you do right now is you take profits on a tremendous run that we've had since january 1st. if you want to actually still capture some of that up side, you can use options so you control your down side. i mean, if you just kind of look at any market, as you said, we're going to get some pullbacks here. what scares me is at bottoms everything looks awful and at tops everything looks fantastic. not saying this is necessarily a top, but it just seems like there's so many things going right that that's when i start to get scared as a trader. and it's time to at least take some profits off the table. >> all right. jim iuorio, there's no law against taking profits. but you know throughout this whole stock market, you can go back four years if you want, but i'd rather go back, you know, let's go to last fall. maybe 2011. it's the wall of worry that has been a big help.
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people don't expect this to happen. it is happening. it may go on for a bit. how would you play it in brief? you're all going to come back. but how would you play it right now? do you buy indexes? do you buy specific stocks? do you move money from bonds into mutual funds? what do you do? >> i'm long the market. i'm long health care. yesterday it looked like it was right on the cusp of a correction when the futures were about to trade below 1490. it didn't. the chart still looks fine to me. and the story, there's way less wall of worry than we've had in a long time. the numbers out of china are decent. europe's moved itself a little off the front page. and the story here is not bad, particularly in housing which is what we're looking for. but the most important thing was the nuance of the number today which was fascinating to me. the two revisions were significantly stronger and yet the rate ticked up to 7.9, making that 6.5 level that the fed has given us a threshold, look miles away. so that's game on for as far as the fed goes. so the fed's in and the story looks okay. >> jimmy p., it was a pretty unimpressive employment report, unemployment report, except what jim iuorio said, the revisions
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were very positive, and it just seems like there's no recession threat now. and i think that helped to trigger the market today. i agree with pisani, the isms were good and the car sales were good. but was it the revisions that made this report? i mean, 7.9% unemployment, 150,000 jobs, that's nothing. that's way below where we should be. >> i think you have to feel better about this report and the fact it came after that gdp report. the gdp report it looked like who knows? whenever an economy shrinks, usually it's like kosh roaches, not just one, usually you get another negative quarter coming soon. so this kind of reassures us maybe there's going to be upward revision in that fourth quarter gdp report. so things look okay, we're creating jobs, but as you said, job growth is still really, really slow. listen, to get -- remember, we want to get back to like that 5% rate maybe. at this pace it will take 100 months to get back to 5%. so listen, maybe okay, you don't have to worry about a recession, but if you're looking for strong growth we're not seeing it yet. >> this is still -- we're going
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to bring in somebody from the joint economic committee in a second. this is still the worst modern recovery in gdp and jobs going back to 1947, no matter how you slice it. but i think the upper revisions really helped trigger the market. let's get a second opinion on today's jobs stories and the outlook for the economy. here we have a republican response. south carolina republican congressman nick mulvaney. he's a member of the joint economic committee. and mr. mulvaney, welcome back. i know you're going to be critical of this lackluster jobs story. but i do want to ask you for your take on the roaring stock market. sometimes you have to wonder, if things are so bad, why are they so good? what's your thinking? >> larry, you know, at the opening of the show you went down the five things that may be contribute og to this and the last one was the easy money policy. and that worries me a great deal. i worry about how much fiscal policy is driving the market right now. i worry about how much of this bull market is driven by debt, how much of our gdp growth, what little we have, has been driven by debt. because that can't go on forever.
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you know it, i know it. and i wonder if we're not just playing musical chairs and waiting for the music to stop. >> but even though -- i mean, i follow the work of the joint economic committee. my friend kevin brady and you and i have talked before. even though this is the worst recovery since 1947 in terms of the economic growth gdp and in terms of jobs, it is, it is, nick mulvaney, one of the very best, maybe the best recoveries in profits. and i think that's underrated. nobody can manufacture profits except the ingenuity of american private businesses. and that seems to be carrying us, however mediocre the growth figures are. >> agreed. and i'm not going to sit here and badmouth the american system because i'm as big a fan of it as you are. what i'm worried about with this continued anemic job growth, the administration itself says, i think everybody on the show would agree, we'd like to see that number not 156 but 250,000 jobs a quarter. that's what we need to get back on the trajectory to where we were before the recession. without that i worry about how
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sustainable those profit growths are. yes, we can all squeeze money out of the operation over the short term. we can get additional productivity gains. you get cost savings. but unless people are going back to work i worry about how sustainable this recovery is. >> well, there's still 22 million people that can't get a full-time job. >> yeah. and the number's getting bigger every single day. we added 156,000 jobs, but we lost 170,000 people out of the job market. if you had a job market the same size as it was when president obama took office, the unemployment rate today would be over 10%. this is a number nobody talks about anymore. it's a stunning number. there's simply not enough people in the workforce. and that's what makes me worry about the long-term viability of the recovery. >> and people are still withdrawn. 169,000 left the labor force in the month of january. that cannot be good. 8.5 million people are not even over the labor force in the past four years. 8.5 million people have withdrawn from the labor force. i mean, that's a terrible number. i'm not making a case, by the
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way. i'm not a bull on the economy because i think there are too many problems on policies and whatnot. but these jobs numbers generally, they keep looking very, very, very mediocre. >> i tell my folks back home, we can ignore the rates, ignore the revisions. the one question, the one question only is how many jobs did we create last quarter? until that number is 200,000 or 250,000 i think there's a lot to be concerned with. >> the one thing i'll ask, though, i know you're not here for your stock -- maybe you have a stock market view. we'd love to hear it. it just is interesting to me that the stock market, which is always regarded as a leading indicator of the economy, and i regard it as such, not the only one but one important one. stocks are sending a much more optimistic, positive message. >> where else are you going to put your money, larry? i'm not going to put it in bonds. what other choice do you have? if you're looking at as one of yur other commentators says, easy main oust fed, traditionally the stock market has been a good investment. you're right. it's not the only contributing
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factor. there are some fundamentals that are pushing that. but i think we're discounting the impact of the fed's policies on the market if we completely ignore it. >> all right. south carolina congressman nick mulvaney from the joint economic committee. we appreciate your insight as always. let's get right back to our panel. brian kelly, jim iuorio, and jim pethokoukis. you know, brian kelly, it is interesting. some numbers coming out. the last time we were at the 14,000 mark in the fourth quarter of 2007, price-earnings multiple 22 times. 22 times. right now i think a little bit under 14. is that fair? maybe 13.8. i don't know what the exact number is. the average long term is 15 times. now, that tells me the valuations are pretty reasonable based on profits. >> yeah. and that is the bold case for the rest of this market is valuations certainly aren't stretched. i think if you want to be bearish you could probably look inside a lot of these numbers and find something that might
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not work. you have to assume that forward -- those forward earnings are correct, which if you look at some of maybe the ibm numbers and the vmware, those guys are saying, listen, corporations are starting to slow down in the fourth quarter. so if you start to look at that and you say all right, maybe earnings aren't going to be that great next year, then the market does start to look a little expensive. >> jim pethokoukis, though, good ism numbers. surprising manufacturing number today. i think most people surprised. car sales surprisingly strong. for all the rigamarole about payroll taxes and consumer taxes, car sales are very about. housing improvement. the energy boom is one of the most outstanding parts of this economy. we may even be seeing a comeback in capital goods business investment, durable goods, factory orders and all that. so maybe we're underestimating the great american economic machine. i know washington's gone wrong. but maybe the internals of the economy are better than we think. >> well, i'm not going to underestimate the private sector. and i'll tell you, one big
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advantage this economy has right now, we talk a lot about what the economy did in the '80s, that the profit sector is in much, much better shape than it was back coming out of that recession '81, '82. there still had to be a lot of restructuring, there's a lot of inefficiency from the 1970s. so we're starting with a much healthier private sector. i really think that's, we still have some good demand coming from outside the united states. we have china and all things -- we're not worried about the china hard landing. we're not worried about the debt ceiling crisis. we're not worried about, well, for the moment, the eu -- we have that kind of psychological factor. a healthy private sector. and the problem is what? the problem is government and bad policy. and that's what we have to offset. >> but jim iuorio, i want to know where to invest. do we buy gold, silver, and commodities? do we buy banks, which are lagging a little bit? do we buy industrial cyclicals to play the world boom, if there is such a thing? in other words, how do you invest right now, having passed this 14,000 benchmark? >> well, there's a couple things. first of all, when caterpillar
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released its earnings it talked about good numbers out of housing. and you stloe in china. you invest in things like copper. you know i still like gold and silver. and today with the green light from the fed i'm still going to stay in things like those. i am in bank of america. i am in health care. i think the stock market looks pretty good. you said before, though, the stock market tends to be a leading indicator of the economy. when the fed pumps in so much money and global banks pump in so much money, i think you throw out the old playbook a little bit. i think the stock market can do fine even though as you said -- and i implied before those jobs numbers weren't that bad. weren't that bad compared to what you used to. when you're banging your head against the wall whurks stop it feels pretty good. >> but the whole world is growing. all the global stock markets are rising. i think that's very important. and there is no inflation in sight. i mean, you look at the inflation break even forwards and all that stuff and all those indicators, you just don't see it. >> but it's a flood of liquidity. it's not just liquidity -- >> so maybe they're right. i've seen some guys are saying
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maybe bernanke has this story rather more right than many of the cynics say. >> compared to what the opposite would be if he didn't do it. like look at a state like illinois. the only way they can dig out of their pension debt is if money's thrown in the system and the dollar value is driven down a little bit. they see only -- >> well, they're the worst rated state. did you see that today? s&p. even worse than california. illinois is pathetic. >> appreciate it. >> they're just bombing taxes every place else. but b.k., i'll give you the last word on this. it's an interesting thing. the total economy, nominal gdp, if you take real gdp and inflation, you guys know this. look at nominal gdp. it's growing at 4% or slightly less. that is not inflationary. that is not overexuberant monetary growth. if you just look at that number. and from that barometer, from that metric you've got to say maybe bernanke's doing it right. >> well, here's -- i'll make it real simple. the markets are going up because
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bernanke is pumping as much money into the economy and into the markets as possible. the bottom line is if it works, and i'll put if it works in quoetsds, he'll blow the biggest bubble of all time. maybe it's going to work and if it does we've got a long way to go. >> when that bubble comes we're all going to be out. our timing is going to be absolutely perfect. and my indexes, my s&p indexes, which are doing rather well right now, i've got to get out because i'm retiring on them. anyway, brian kelly, thank you. jim iuorio, you're great. jimmy pethokoukis going to stick around. we've got much more work for you. another big issue today, very big issue. did team obama make any real changes to the obama care contraceptive coverage or not? the much-promoted accommodation for religious groups may be falling flat. is there still religious freedom in this story? some catholic leaders today say it's all window dressing. later on in the show it's super bowl weekend, but the big buzz
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is all about the stunning revelations surrounding dan marino and his love child. our own brian schactman spoke to marino just before the scandal broke, and wait until you hear what they talked about. and don't forget, folks, free market capitalism is the best path to prosperity. let me tell you, private companies operating in the free market are holding our story together. not washington. free market private companies. just leave them alone. i'm larry kudlow. we'll be right back.
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big story today. obama care contraception and religious freedom. did anything change today when the new regulations were published by the health and human services department? some religious groups are saying there's still no real opt-out for religious groups, catholic churches, and the rest. joining us now we bring in our cnbc contributors. you've seen jimmy pethokoukis this evening. we bring in keith boykin and w.o.r. radio host mark simone. i just want to play with this story a little bit. what they've done -- i'm going to start with you, mark simone. what the new regs have done is they've expanded the definition of religious institution that's are supposedly exempt. from churches to religious
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schools, hospitals, and charities. doesn't have to be catholic. could be anybody. but they have expanded the definition. but as i understand it, employees can go and get contraception, including the pill after, by going to the insurance company that is used by the institution. and the institution, which is self-insured through the insurance company, they've got to pay for it. somehow. so i don't see what's changed. they've expanded the definition, but what's changed? >> it's simple. they've made it much more complicated than it already was. >> right. >> it wasn't complicated enough and they've figured out away to make it cost even more and make it harder to keep track of. this is your government in action. >> it's true. the whole idea here was that okay, let's just use the catholic church for a minute. that the church would not have to pay directly for concept rah sepgs for their employees. what they're saying is you're exempt. you don't have to pay directly. and they've included these other religious institutions including charities. religious colleges and so forth. but, but if woman wants
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contraception, she goes to the insurance company behind the church, and the insurance company makes the direct payment. but the church has to pay through higher premiums. somebody's got to pay for this. that's why i think this is phony as a $3 bill. >> well, i have to say i can't say i understand it all myself because it's very complicated, but i do think that the insurance company is absorbing the cost because they're paying a fee in order to be part of the exchange and the fees will be higher because of this. so arguably you can make the point they're going to pass the fees and the premiums -- >> that's what i'm saying. >> but i don't know any other way to get around this. you've got two imperatives here. one is you want to provide the -- the administration wants to provide this coverage for women. on the other hand they want to be flexible to religious institutions. so it's going to be complicated. there's no way everybody's going to like it. but it looks like at least cardinal dole sn looking at it, he hasn't made a statement on it, and some religious organizations are thinking this is a step in the right direction. this may not be perfect but --
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>> what if they just removed the mandate? what the church wanted and what other conservative groups, orthodox jewish groups, for example, and others who are opposed to contraception, they're opposed to the day after, they just said remove the mandate. and it just seems like team obama will not remove the mandate. >> i think once again we've seen ideology seep into public policy. he just ran a whole campaign trying to appeal to women, on contraception, and now he's going to go back on -- no. they're going to keep pushing that. look, he has a little problem with the second amendment. apparently his administration has a problem with parts of the first amendment. the constitution's over 100 years old the democrats keep saying. so maybe there are certain parts of it they just don't quite get. and they seem to have a problem, particularly the far left progressive, often atheist base of the democratic party just don't get it, just don't understand why people have religious objections. >> i just want to ask -- >> every government program mushrooms. the original idea of health care was if you had a catastrophic illness it would step in and
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help you. it has now mushroomed into any little need you have. your flu shot is covered. your birth control. >> that's why the price has spiraled. >> but larry makes the point the reason why health care reform is so important, the reason why it was important to do in 2010 is because of the cost. the cost had been skyrocketing before obama care. and if you don't -- >> and after obama care it's going up more. >> it hasn't been implemented yet. but once you do something to control the cost, you can actually do something that can make it easier for more people to get access to it. it will help to make it easier for the insurance companies to provide coverage because they'll have more people who -- >> but every time you do that -- every time you control the cost it seems to get more expensive. >> it's not just religious institutions. look. if somebody owns a business, a family-run business, they own a business and they have a moral or religious opposition to contraception. okay? why should they have to deal with this mandate? there's nothing in this hhs
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thing that's changed that. you own a business. leave the church alone. you still have to pay the mandate for the contraception that you don't believe in. >> but this is -- >> businesses don't get an opt-out. >> they're completely excluded. >> that violates religious freedom. >> there's no constitutional imperative about businesses having to make their own decisions about which laws they're going to comply with. this is the same argument they used to justify opposition to the civil rights act in 1964. >> it's not exactly the same thing. >> i'm not saying it's the exact same thing. let me finish my point. i'm saying that businesses do not get the right to -- not to comply with the federal law. it's different when you're talking about religious organizations. they have their right to opt out. but you can't say that businesses are -- >> always a civil rights guy. i'm still a civil rights guy going way, way back. to me religion freedom is different. it is just different. if you have a religious conscience you should be able to abide by it. the government should not be able to tell you otherwise. this is just a health care
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mandate. >> the government is not telling what you to do. >> they've created a right to employer provided contraception. you've created in the constitution, in the penumbra a new right to -- exactly. >> you've created that in your definition, your interpretation of it. but clearly what the obama administration is trying to do is to figure out a way to thread the needle here, to provide coverage for people and at the same time deal with the concerns of the religious organizations. the fact they continue to make compromises is an indication that they're trying to be flexible. >> well, not alienating its female base, which it tried to get all ginned up, isn't that basically what it is? the whole element of the democratic party, far left, hollywood, that just doesn't get the religious objection. they think it'ssaly. >> people do get the objection. but government is about making choices, jim, and it's about making balances between competing interests. we have two very strong competing interests here at play, and the president has to make the tough choices about how to work that out. >> right, keith. there is the competing interest.
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one's called the constitution. freedom. first amendment. >> you're not forcing anybody, any religious organization to violate their principles. they're not forcing them to pay for contraception. >> you don't think you are. but they think you are. >> take it to the supreme court and let them decide. zbll, you're rig >> well, you're right about that. and that's where it's going. all i'm saying is the means of payment is irrelevant. that's the deal. the fact that the clathd church doesn't have to directly pay for contraception is not the point. they will indirectly pay for it. and everybody knows that. we'll see what cardinal dolan says. he's weighing it. you're right. they're taking a look at it. some catholic groups today were up in arms. the susan b. anthony group was up in arms. but we'll see. it's a complicated issue and i think they've just made it more complicated. now, let us move on. have you noticed a jump in gas prices? they are starting to creep up again. the question is will it hurt the economy or someone we're going to take a look at it. and later on, with our guests here, the super bowl kickoff just two nights away. the talk of new orleans is about a retired player, by the way, a hall of famer.
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we will focus on dan marino and his personal scandal and his little love sxhield whethchild it's going to cost him anything or not. they got us a great ball player, but now he's going to have to get through this. we will be right back on "the kudlow report." ♪ alright, let's go. ♪ shimmy, shimmy chocolate. ♪ shimmy, shimmy chocolate. ♪ we, we chocolate cross over. ♪ yeah, we chocolate cross over. ♪ [ male announcer ] introducing fiber one 80 calorie chocolate cereal. ♪ chocolate.
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80 calorie chocolate cereal. (announcer) at scottrade, our clto make their money do more.re (ann) to help me plan my next move, i take scottrade's free, in-branch seminars... plus, their live webinars. i use daily market commentary to improve my strategy. and my local scottrade office guides my learning every step of the way. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade... ranked "highest in customer loyalty for brokerage and investment companies." you name it...i've hooked it. but there's one... one that's always eluded me. thought i had it in the blizzard of '93. ha! never even came close. sometimes, i actually think it's mocking me.
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[ engine revs ] what?! quattro!!!!! ♪ quattro!!!!! see lioutdoors, or in.ight. transitions® lenses automatically filter just the right amount of light. so you see everything the way it's meant to be seen. maybe even a little better. visit your eyecare professional today to ask about our newest lenses, transitions vantage and transitions xtractive lenses. experience life well lit. ask which transitions adaptive lens is best for you. a big story that hits you personally. big jump in gasoline prices this week. and courtney reagan here with all the details. good evening, court. >> good evening, larry. well, it's rotten timing. americans are paying the highest
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gas prices on record for february 1st coupled with now higher payroll taxes. there wasn't an immediate pullback from consumer spending from that tax increase. now that a full month has passed and gas prices are moving higher the effect could begin to take hold. morning stanley cal claiths those making less than 40,000 have 6.4% less discretionary spending power followed by 4% for those making between $40,000 and $65,000. plus prices at the pump are now at higher levels than they have ever been this time of year. the price for regular unleaded gas jumping an average of four cents a gallon overnight to a national average of $3.46 according to aaa. gas prices have risen 13 krebts in the past week alone. according to barclays' bob durbel for every ten cents gas prices rise the median family will pay an additional $110 at the pump annually. it may not sound like much but it's the quick spike in gas price that's feels a little worse than a slower uptick often magnifying that would otherwise be an appropriate pullback in discretionary spending. the combination of the now lower
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purchasing power and higher gas prices worrying those invested in discount retailers. rbc capital discounting dollar general and family dollar shares for a number of reasons including the potential spending impact from rising payroll taxes. rbc says higher taxes caused lower and middle income consumers to pull back spending as they do when gas prices rise. guess what? now americans are facing both at once. but however, larry, i should note that sometimes discount retailers see sales increase because higher income americans start to trade down when discretionary income becomes strained. >> and you know, what courtney, i just have to say, a, i didn't think the payroll tax cut had much economic impact. rebates, temporary things never do. and b, i hear you on the gasoline prices. but i've got to see much more. i've got to see much bigger movement. i've got to see $4. we went through this about a year ago. wound up being much ado about nothing. i've just got to see more, that's all. >> it's very possible. $4 is a very, very key
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psychological level. we're far from it. but again, it's that quick spike that tends to freak people out a little bit. >> take care. courtney reagan, we appreciate the update very much. now, what is the bigger story in sports? a, the upcoming super bowl this sunday night. or b, dan marino's fall from grace after admitting to fathering a love child with a cbs production assistant? we will look at both a and b coming up next. [ male announcer ] i've seen incredible things. otherworldly things. but there are some things i've never seen before. this ge jet engine can understand 5,000 data samples per second. which is good for business. because planes use less fuel, spend less time on the ground and more time in the air. suddenly, faraway places don't seem so...far away.
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welcome back to "the kudlow report." in this half hour a great american personality and politician died today. of course we're talking about former mayor ed koch. the mayor who helped america's biggest city make a big comeback from bankruptcy and a very bad image. we're going to talk with some people who really knew him and his legacy in just a few moments. but first up, sundaying super bowl will be the first in new orleans since hurricane katrina. brian schactman is live in new orleans tonight. good evening, brian. >> hi, larry. you know, the mercedes-benz superdome right over my shoulder seven years ago was in absolute tatters. now it has mercedes-benz as a sponsor with a $100 million
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ten-year deal, and it's absolutely beautiful. the city has been transformed since katrina in '05, and of course the bp spill in 2010. they spent about 300 million upgrading the superdome. another 300 million upgrading the airport. and another 400 million on various other projects in the city. i've been down there about four times in the last four years, larry. the city has never looked better. and also on a jobs day i do want to note the unemployment rate in the city of new orleans right now is under 5%. so if anything could say they came back stronger, you could definitely say that about new orleans. although i will tell you that there are some pockets that still show the damaging effects of the storm 7 1/2 years later. >> well, okay. but it's still great news. and the low unemployment rate is great news. >> absolutely. >> now, i hate to do it to you, old buddy. but as you know, it's a very big part of the super bowl story. a lot of people are talking about it. has nothing directly to do with the super bowl. that's of course dan marino. he's part of the cbs team covering the game.
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has a love child. we learned that today. "the new york post" put the story on the front cover. i don't know if we have a picture of that or not. so i want to ask you, look, marino is a great hall of fame player. no question about that. what is this stuff going to mean? does it have any impact on his standing at cbs in your opinion in does it damage his future going forward for endorsements? what do you think this means? >> i think a lot of that, larry, remains to be seen. i'm sort of here to report and not judge. i will say cbs came out and said he will be in place on sunday and he will do his job. they wouldn't do anything before the super bowl anyway. but i want to point out to people these jobs are elite jobs. they get paid a lot of money. they don't have to do a lot of work. and there's dozens of ooup star ex-athletes waiting for those positions. so if they think his brand is damaged they will probably do something. but they obviously like him quite a bit over at cbs. but you have to also know he did not tell cbs about this until the day before the story broke. and the day before he told cbs
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we actually talked to him about the value of having a brand. and this is what he had to say. >> an ex-football player doing tv. that's my brand, i guess. an ex-football player doing tv. someone that loves their job, enjoys what they're doing, has been blessed to play 17 years in the league. and now i get a chance to talk about it on a big stage. like the super bowl. and like "nfl today" each and every week. and hopefully i'm liked well enough to be able to represent some companies here and there. and i think i've done that pretty well. and just try to be the best person you can be and have fun with it. and enjoy it. >> there is no doubt, larry, that his brand is hurt by this. whether he will lose his job at cbs, you won't know that for some time. he's got a contract. he's going to be in place this sunday. we'll see how that goes. he'll feel a lot of pressure. and of course when you really think about what's most important, there's a 7-year-old girl involved here and you hope she has the chance to grow one parents and have a good life. >> well, you know, this is not
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my favorite story, these type of things. but you're talking about the 7-year-old girl. he is financing her. he's paying for it. including the mother, as far as i know. and if you buy into the story that was in the paper today, he did tell his wife. now, he didn't tell anybody else, including his own agent. but he did tell his wife. so in some sense, while this is not my favorite story, he has kind of manned up about this. i mean, i'll give him that part. >> listen, you don't know where the reports in the "post" and the absolute truth is probably something in the middle and we just don't know all the reality. and whatever happens, i mean, the family is the most important part. he obviously was supporting the woman who had the child and the child. there's no doubt. according to reports, millions of dollars changed hands. he didn't even tell his agent, larry. he had other lawyers take care of whatever agreements that he made with the mother of the child. so listen, it's in the open. i guess you have to talk about it. and it's a tough story because he's a hero for a lot of people.
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whether that changes or not i think that depends on how he handles it from here on out. >> always sort of compared to what. brian schactman, appreciate it. enjoy your super bowl down there. mark simone, i don't know. athletes do a lot of very strange things. this one's not near as bad as other stuff we've been covering. what do you make of this story? >> first of all, this shows you president obama's right. you've got to pay for a lot of contraception out there. then we wouldn't have this story today. why am i the only one -- why am i the only one not bothered by this? >> is he a catholic, marino? >> you know, if these horrible menendez allegations turn out to be true, that's something we need to look at. the anthony weiner case showed a tremendous lack in judgment. this is an athlete. >> if the menendez prostitution turns out he is going to lose his position. i don't think marino will lose his in cbs. but menendez will lose his position. i'm not saying i know but if the allegations are true he's history. >> read a book about babe ruth. he frequented prostitutes. you know, an athlete, the bar is
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lower. you're not required to behave like a saint if you're an athlete. >> i'll get keith's take on this. will you watch cbs analysis with dan marino knowing he has a love child? >> i'm sure there are a lot of athletes and former athletes who have love childs, we just don't know about it. you're right, he did man up about it, he talked about it. >> i'm impressed with it. >> tiger woods had his own issues and now he's out there playing on the tournaments and winning again. pete rose has his own reality show. lance armstrong is on oprah. these guys will get over this. people don't expect their sports figures to be heroes. >> and we have not heard that marino's wife came at his car with a 3 wood and smashed his -- >> there was no car accident. >> nothing like that with tiger woods. this looks like child's play. i know you're dying to get in on this. but you're not. jim pethokoukis, keith boykin, mark simone. please stay right where you are. did you really say that about contraception? you did, didn't you? all right. now, it's it is time on "the kudlow report." this is going to be a quick test. we want to know, are you in
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favor of the budget-cutting economic-boosting sequester or not? we're going to get your answers from the panel prepared and ready to make i astand. i know they all have opinions about everything. all right that's a fifth-floor problem...
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welcome back, everybody.
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now, here's another big political issue. 27 days and counting. will washington finally get it right? i say let the spending cuts sequester kick in across the ballot. now all those silly departments. commerce, labor, interior. all of them. it's good for taxpayers and it's good for growth. but i want to get the views of our distinguished panelists, jim pethokoukis, keith boykin, and mark simone are back. keith boykin, isn't it time to just put the foot down and cut spending across the board, something they never want to do? >> well, i mean, the republicans don't want to cut defense. some of them actually are willing to do that. you are, i guess. but i mean, i think that's really the issue. the reason why they constructed this is so it would hurt everybody. i don't think it's a good idea. but my whole philosophy is i don't think the deficit is our top issue. i think if you're really concerned about the deficit we should have gone over the fiscal cliff and cut the deficit that way. but if you aren't concerned about the deficit, if you think job growth is the most important thing and growth in general, then i don't think you should
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either cut taxes -- i don't think you should raise taxes or cut spending right now. i think you should focus just on stimulus. >> what they should do is slash across the board all these goofy departments, just really rip into them. and along with that pro-growth tax reform. especially pro-growth business tax reform. and then you'll have the kind of growth that keith is talking about that would actually solve the financial position. >> keith wants growth in general. i don't want growth in general. i want private sector growth. i don't want a bunch of phony government spending that's going to proup gdp numbers. i want private sector growth. if the president wants to make a deal where we get rid of some of these short-term spending cuts for long-term spending cuts he can, but the deal's not going to be -- he doesn't want to do it. he wants $600 billion of tax increases. >> that's right. if you monkey around, mess with these spending cuts, the next thing you know, the spending cuts will evaporate and tax hikes will be put in their place, and then the whole washington will be a grinding sand in gears. >> the only spending cuts ultimately you can trust are the
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ones they're going to have in the next 12 months. >> that's it. what do you think? should they go ahead and do this? >> you wrote the best column on it. as you pointed out, military spending is already down at the baseline. we don't have to worry about that in these cuts. and you don't want the government spending money because 40 cents of every dollar goes to debt. if the private sector spends it, you get 40% more bang for your buck. >> that's what i'm trying to say, is i actually think lower spending is good for growth because it's good for the private sector growth. the smaller the government the healthier and more vibrant the public sector because they get to keep their own main. they keep to keep their own money for a change. sxunk'll sam's snout will be out of their lives. at least a little more. >> that's the best point ever. you always make this point. if these obama policies were going to work, they would have already worked. >> they're already working, first of all. we've had 6.1 million new jobs. 35 consecutive months in private sector job growth. we added 157,000 jobs this -- >> don't lower your expectations. >> no, listen. four years ago -- four years ago
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we lost 800,000 jobs, in january 2009. >> that's going to be five years ago. that's going to be six years ago. >> we -- >> we're still not getting -- >> but we have -- we've never had a january in 2009, since 1940, we've never -- in 60 years we've never had a month we lost 800,000 jobs in january. >> when we get back to 5% before i retire. that's what i want to know. >> seriously. i don't disagree. according to the joint economic committee and the bureau of labor statistics, yes, if you measure it from the bottom, over the past 35 months you're quite right. 6 million new private sector jobs. okay? the average of 11 recoveries since 1947, same 35 months, 10 million. during the reagan years 13 million. so any way you slice it -- >> two points. >> -- if this stuff was going to work if would have worked. >> two points. one, yes, this recovery is a little more anemic than others.
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but that's partly because this is the worst economic crisis we've had since the great depression. secondly, in the reagan recoveries you have to remember he actually increased government spending. we're actually contracting government spending. >> as a share of gdp government spending fell. and anyway, i was there in the reagan administration. and that's one of the reasons we created all those jobs. now, you guys stick around, please. i'm taking a little credit for it. we're about to talk about the death of a major american figure of the last 50 years really. ed koch. he passed away today at 88. but he will long be remembered. we're going to explain why koch's story has so much national significance. front page everywhere. next up on kudlow. this is for real this time. step seven point two one two. verify and lock. command is locked. five seconds. three, two, one. standing by for capture. the most innovative software on the planet...
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heart failure. he was 88 years old. koch led new york city from 1978 to 1989. he's known for saving the city from financial ruin. here now is tv journalists who probably had among the most experience covering ed koch. chuck scarborough. he's the lead wnbc anchor here in new york city. he's been with wnbc since 1974. he's also a broadcasting hero of mine. chuck, it is great to have you on. i appreciate it. now, ed koch. you know a lot of ed koch stories. we all do. i've got mark simone here. he knows a ton of ed koch stories too. but koch was a brilliant showman. a brilliant publicist. okay? was he as good a mayor as he was a publicist? you know, how am i doing and all
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the slogans? how do you rank him? >> that was all part of it. he was a terrific mayor for the time. and i think you have to understand the context of the time. in 1977. new york city was completely demoralized. the city had gone broke. the budget was so far out of whack nobody would lend the city money. they had to turn their finances over to a state created agency. it was crime ridden. it was a desperate time when you could have serious people having discussions about whether new york would even survive, larry. and along came this brash, irrepressible, iconoclastic, this congressman who ran to the right of everybody else in 1977, won the mayoralty and came in with this kind of irrational optimism about how new york was going to fare in the face of all of this doom and gloom, and took charge in a way that i think only somebody with that kind of personality could take charge. >> seems like in some sense, right, he carried the city. now, we had the emergency financial control board. but koch was determined to implement that. and it was tough stuff.
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especially for a democrat. especially in new york city. but in some sense it seemed like certainly in those early days in his first term by the distant of his own personality he carried the city to a higher level and got it to recover. >> he did. i'll tell you a key. quick story. not long after he took office he was at gracie mansion, which is the mayor's house in new york city, and he with a female deputy mayor was standing on the front porch and they were gazing out at the east river, and a rat ran across the lawn. and the deputy mayor screamed. and he said, don't think of it as a rat. think of it as a squirrel. he saw things the way he wanted to see them, not the way they were. and he pushed toward that vision. and he was able to tackle very thorny issues, particularly in this town. the issues of pay. the issues of cuts. getting the budget under control. he did eventually balance the budget when it was ridiculously out of whack. he did that in a few years and got the city back on firm financial footing.
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but it was a tough time. very tough time. >> he called himself a liberal with sanity. and he was always against social engineering. in fact, chuck, he used to say, why does new york always have to be number one in welfare and medicaid and -- couldn't we be number three and number four and balance the budget? that's one of the things i always liked about him. >> and he had no compunction at all about endorsing republicans. he endorsed for the first time rudy giuliani, although he changed his mind about rudy eventually. he endorsed bloomberg. even endorsed president bush in 2004. >> yeah. >> he endorsed the person he thought was best for the job. he wasn't locked into this sort of dogmatic position as a democrat. and he was certainly a certifiably liberal democrat. >> mark simone, let me come back. there are some darker sides to the koch story. i agree with what chuck's saying. his first term was really terrific. really superior. but then he ran for governor against cuomo and lost. and a lot of people said he really kind of gave up a lot of that stuff. he had, for example, very
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corrupt democratic party. he had guys like stanley freeman in the bronx, who ran the bronx corruptly, went to jail. he had donald mannis in queens borough who wound up committing suicide he was so corrupt. and koch never fought that corruption and actually gave up on the budget battles that he did so well on. i mean, did he sort of peak and then go down as mayor? >> yeah, but that needs some explanation. it was a tam ni laul machine controlled city hall and all the government departments for years and decades. that was all their -- they would kind of give the nod to who could be mayor and that was koch, there was not much he could do about that stuff swirling around him. in the pregiuliani days he was the best mayor we ever had in new york. >> i agree. but i've got to give credit. i think giuliani did the crime wave ending along with bill bratton in ways that ed koch didn't. and i think giuliani fought corruption. i think koch was great in his first term. and i think he was fabulous later on when he was out of office. i mean, chuck scarborough, ed koch out of office was a sight to behold and a sight to be
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heard. i mean, he really was incredible out of office. >> well, he wanted to be relevant. he said he wanted to be relevant till the day he died. and he did that. and i loved his throw the bums out campaign in 2010, when he went around demanding that albany, which i think you might say is ethically challenged, demanding that the politicians in albany sign the pledge to reform the ethics, tighten up the ethics, to tighten up the state budget, and to turn over the redistricting where a lot of mischief takes place to an independent board. he pushed that. >> chuck scarborough, you are terrific. >> thank you. >> still my broadcasting idol. keith boykin and mark simone, thank you very much. jim pethokoukis had to run for a train. i'm larry kudlow. we'll see you monday. ♪
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